‘Chance of 2026 recession’ despite interest rate cut – follow live
Welcome back to the City PM liveblog.
The Bank of England has handed Chancellor Rachel Reeves and the Labour government a highly-desired Christmas present today.
The central bank confirmed a chop to interest rates falling to 3.75 per cent – the lowest in nearly three years.
It comes after inflation undershot expectations on Wednesday providing the Bank even more incentive to give the economy a shot of life.
The Office for National Statistics (ONS) said inflation hit 3.2 per cent in the year to November, staying well above the Bank’s two per cent target but coming below market expectations.
The previous month’s figure for inflation was 3.6 per cent by comparison.
Chancellor Rachel Reeves, said: “Getting bills down is my top priority. That is why I froze rail fares and prescription fees and cut £150 off average energy bills at the Budget this year.
“The Bank of England agree this will help cut prices and expect inflation to fall faster next year as a result.”
Economists on City PM‘s Shadow Monetary Policy Committee had voted in favour of interest rates being cut by 25 basis points to 3.75 per cent.
We’ll be bringing you the latest news as we get it.
In the meantime, here’s a few of our top stories from yesterday:
- Monzo shareholders plotting chair coup after top boss was ousted
- Warner Bros to snub Paramount’s takeover in favour of Netflix
- Bank of mum and dad now funding multiple steps up housing ladder
- Interest rate cut likely after inflation undershoots expectations
- Starmer threatens Abrmaovich with court over £2.5bn Chelsea proceeds